B&G Foods North America, Inc. v. Kim Embry ( 2022 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
B&G FOODS NORTH AMERICA, INC., No. 20-16971
Plaintiff-Appellant,
D.C. No.
v. 2:20-cv-00526-
KJM-DB
KIM EMBRY; NOAM GLICK,
Defendants-Appellees. OPINION
Appeal from the United States District Court
for the Eastern District of California
Kimberly J. Mueller, Chief District Judge, Presiding
Argued and Submitted January 12, 2022
San Francisco, California
Filed March 17, 2022
Before: Ronald M. Gould, Mark J. Bennett, and
Ryan D. Nelson, Circuit Judges.
Opinion by Judge Bennett
2 B&G FOODS N. AMERICA V. EMBRY
SUMMARY *
Civil Rights
The panel affirmed the district court’s dismissal of a
complaint, reversed the denial of leave to amend, and
remanded to give plaintiff an opportunity to amend the
complaint in an action brought pursuant to 42 U.S.C. § 1983by food manufacturer B&G Foods North America, Inc.,
alleging that defendants Kim Embry and her attorney, Noam
Glick, violated B&G’s constitutional rights by threatening to
sue and ultimately suing B&G to enforce California’s Safe
Drinking Water and Toxic Enforcement Act of 1986, better
known as Proposition 65.
Proposition 65 requires businesses to notify customers if
their products contain chemicals known to the state to cause
cancer. Acrylamide, the chemical at issue, is on a state list
of such chemicals based solely on laboratory studies in
which pure acrylamide was given to rats or mice. Any
person in the public interest may bring a Prop. 65
enforcement action upon satisfying certain requirements.
Embry, represented by Glick, sued B&G in state court,
alleging that B&G’s Cookie Cakes contain acrylamide and
that B&G’s failure to warn customers of that fact violates
Prop. 65. B&G in turn sued Embry and Glick under § 1983
alleging that the naturally occurring acrylamide found in its
Cookie Cakes did not cause cancer and that defendants’
prelitigation activities and suit required B&G to engage in
false compelled speech in violation of the First Amendment.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
B&G FOODS N. AMERICA V. EMBRY 3
The district court dismissed B&G’s complaint based on
the Noerr-Pennington doctrine and denied leave to amend
based on futility.
The Noerr-Pennington doctrine derives from the
Petition Clause of the First Amendment and provides that
those who petition any department of the government for
redress are generally immune from statutory liability for
their petitioning conduct.
The panel applied a three-step analysis to determine
whether defendants’ conduct was immunized under Noerr-
Pennington. The panel first held that B&G’s § 1983 suit
burdened defendants’ petition activities. At step two, the
panel held that defendants’ prelitigation communications
and suit to enforce Prop. 65, an initiative adopted by
California voters to protect the public from harmful
chemicals, were protected by the Petition Clause. The panel
further determined that B&G had failed to show that any of
the sham exceptions to Noerr-Pennington applied based on
the allegations in the complaint. Finally, applying step three,
the panel held that even assuming defendants were state
actors, the Noerr-Pennington doctrine barred B&G’s § 1983
action challenging defendants’ protected petition conduct.
The panel reversed the district court’s denial of B&G’s
motion for leave to amend the complaint because it was
unclear whether amendment would be futile. The panel
noted that B&G proposed additional allegations that could
support the application of the first sham exception, which
examines the objective reasonableness of a defendant’s suit
and defendant’s subjective motivation.
4 B&G FOODS N. AMERICA V. EMBRY
COUNSEL
J. Noah Hagey (argued), Athul K. Acharya, David
Kwasniewski, Tracy O. Zinsou, Braunhagey & Borden LLP,
San Francisco, California, for Plaintiff-Appellant.
Shaun Markley (argued) and Craig M. Nicholas, Nicholas &
Tomasevic, LLP, San Diego, California; Noam Glick, Glick
Law Group, P.C., San Diego, California; Jonathan
Weissglass, Law Office of Jonathan Weissglass, Oakland,
California; for Defendants-Appellees.
Trenton H. Norris, Peg Carew Toledo, and David M. Barnes,
Arnold & Porter Kaye Scholer LLP, San Francisco,
California, for Amicus Curiae Consumer Brands
Association.
OPINION
BENNETT, Circuit Judge:
Plaintiff-Appellant B&G Foods North America, Inc.
(“B&G”), a food manufacturer, sued Defendants-Appellees
Kim Embry and her attorney, Noam Glick (collectively,
“Defendants”) under 42 U.S.C. § 1983. B&G alleges that
Defendants violated its constitutional rights by threatening
to sue and ultimately suing B&G to enforce California’s Safe
Drinking Water and Toxic Enforcement Act of 1986, better
known as Proposition 65 or Prop. 65. The district court
dismissed B&G’s complaint based on the Noerr-Pennington
doctrine 1 and denied leave to amend based on futility. B&G
1
“The Noerr–Pennington doctrine, originally derived from the
decisions in Eastern Railroad Presidents Conference v. Noerr Motor
B&G FOODS N. AMERICA V. EMBRY 5
challenges those determinations. We have jurisdiction under
28 U.S.C. § 1291. We affirm the district court’s decision
that the Noerr-Pennington doctrine bars B&G’s complaint,
but we reverse the denial of leave to amend and remand to
give B&G an opportunity to amend.
I. FACTS AND PROCEDURAL BACKGROUND 2
This case arises from Defendants’ enforcement of Prop.
65, which, as relevant here, requires businesses to notify
customers if their products contain chemicals “known to the
state to cause cancer.” Cal. Health & Safety Code
§ 25249.6. California’s Office of Environmental Health
Hazard Assessment (“OEHHA”) maintains a list of such
chemicals. See id. § 25249.8. Acrylamide, the chemical at
issue, is on the list based solely on “laboratory studies in
which pure acrylamide was given to rats or mice.” Studies
on humans have shown that acrylamide does not increase the
risk of cancer. Indeed, OEHHA conceded in 2007 that
acrylamide is not known to cause cancer in humans.
Any “person in the public interest” may bring a Prop. 65
enforcement action upon satisfying certain requirements.
Cal. Health & Safety Code § 25249.7(d). Private enforcers
can seek injunctive relief and penalties of up to $2,500 per
Freight, Inc., 365 U.S. 127 (1961), and United Mine Workers v.
Pennington, 381 U.S. 657 (1965), provides that litigation activity
(including pre-litigation cease-and-desist letters) cannot form the basis
of liability unless the litigation is a ‘sham.’” Rock River Commc’ns, Inc.
v. Universal Music Grp., Inc., 745 F.3d 343, 347 n.1 (9th Cir. 2014)
(parallel citations omitted).
2
The facts are based on the allegations in B&G’s complaint, which
we accept as true and construe in the light most favorable to B&G. See
Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th Cir. 2016).
6 B&G FOODS N. AMERICA V. EMBRY
day per violation. Id. § 25249.7(a), (b)(1). A private
enforcer receives 25% of any penalty collected, id.
§ 25249.12(d), and may also request reasonable attorneys’
fees, Cal. Civ. Proc. Code § 1021.5. The state receives 75%
of the penalty collected. Cal. Health & Safety Code
§ 25249.12(c).
Before bringing a private enforcement action, the person
must give sixty days’ notice of alleged violation (“NOV”) to
the Attorney General, other local prosecutors, and the
alleged violator. Id. § 25249.7(d)(1). After receiving the
NOV, the Attorney General must issue a no-merit letter if he
believes the action is meritless, but the failure to do so is not
an endorsement that the action has merit. Id.
§ 25249.7(e)(1). A no-merit letter doesn’t prevent the
person from bringing a private enforcement action. If the
Attorney General or other prosecutor doesn’t begin a
prosecution within the sixty days’ notice period, the person
may commence a private enforcement action. Id.
§ 25249.7(d)(2).
California law offers businesses like B&G at least two
exemptions under Prop. 65. First, a business need not
provide a cancer warning if it “can show that the exposure
poses no significant risk assuming lifetime exposure at the
level in question for substances known to the state to cause
cancer.” Id. § 25249.10(c). This is known as the “No
Significant Risk Level” (“NSRL”). For some listed
chemicals, like acrylamide, the OEHHA has published a
quantitative NSRL. See Cal. Code Regs. tit. 27, § 25705. To
determine whether exposure from a chemical in a food
product exceeds the NSRL, the exposure is calculated based
on the “average rate of intake or exposure for average users
of the consumer product.” Id. § 25721(d)(4). Because this
scientific assessment is very burdensome and often
B&G FOODS N. AMERICA V. EMBRY 7
inconclusive (as enforcers disagree on how average
consumption should be calculated), businesses often choose
to settle when their products pose no health risks. Second,
another exemption applies to products “where chemicals in
food are produced by cooking necessary to render the food
palatable or to avoid microbiological contamination.” Id.
§ 25703(b)(1). But to qualify under this exemption, a
business must satisfy a vague standard—that “sound
considerations of public health support” an alternative risk
level. Id. § 25703(b). In sum, because the standards are
unclear and burdensome to prove, businesses often choose
to settle Prop. 65 cases for certainty and to avoid paying
substantial legal fees.
Embry, represented by Glick, has filed or threatened to
file dozens of Prop. 65 acrylamide suits against food
businesses and retailers. Over the last few years, Defendants
have obtained about $1.7 million in penalties and fines from
these actions. Consistent with Defendants’ past practice,
they began a Prop. 65 enforcement action against B&G.
Glick, on behalf of Embry, served an NOV on B&G and the
Attorney General (and others). The NOV alleged that B&G
was violating Prop. 65 because its “Cookie Cakes” contain
acrylamide and B&G provides no cancer warning. The
Attorney General did not issue a no-merit letter and did not
begin enforcement proceedings. Embry, again represented
by Glick, then sued B&G in state court, alleging that B&G’s
Cookie Cakes contain acrylamide and that B&G’s failure to
warn customers of that fact violates Prop. 65. Although
B&G doesn’t add acrylamide to its Cookie Cakes, they
contain some amount of acrylamide formed during the
baking process.
On the same day Embry sued B&G, B&G sued
Defendants. B&G’s complaint alleges that the naturally
8 B&G FOODS N. AMERICA V. EMBRY
occurring acrylamide found in its Cookie Cakes does not
cause cancer. B&G claims Defendants are liable under
42 U.S.C. § 1983 because the NOV and suit against B&G
requires B&G to engage in false compelled speech in
violation of the First Amendment. B&G seeks, among other
things, an injunction barring any threats or lawsuits about
acrylamide found in its Cookie Cakes, a declaration that
Prop. 65’s cancer warning as applied to its Cookie Cakes
violates the First Amendment, and damages.
Defendants moved to dismiss the complaint under
Federal Rule of Civil Procedure 12(b)(6), arguing that
(1) they are not state actors, 3 and (2) the Noerr-Pennington
doctrine bars the action. B&G argued in opposition that
Defendants are state actors in enforcing Prop. 65. It also
argued that the Noerr-Pennington doctrine doesn’t apply
because (1) the doctrine protects First Amendment rights and
states have no First Amendment rights, and (2) the sham
exception to Noerr-Pennington applies because Defendants’
Prop. 65 lawsuit is objectively meritless and brought for the
wrongful subjective purpose of extorting money from
businesses.
The district court granted the motion to dismiss with
prejudice. Assuming without deciding that Defendants were
state actors, the court determined that Noerr-Pennington
immunized Defendants from § 1983 liability. The district
court rejected B&G’s argument that Defendants had no First
Amendment petitioning rights protected by Noerr-
3
A determination that Defendants are not state actors would be
dispositive, as “[l]ike the state-action requirement of the Fourteenth
Amendment, the under-color-of-state-law element of § 1983 excludes
from its reach ‘merely private conduct, no matter how discriminatory or
wrongful.’” Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 50 (1999)
(quoting Blum v. Yaretsky, 457 U.S. 991, 1002 (1982)).
B&G FOODS N. AMERICA V. EMBRY 9
Pennington. It reasoned that while states themselves do not
have First Amendment rights, under Ninth Circuit precedent,
government actors may receive Noerr-Pennington immunity
when they petition on behalf of the public. The district court
found that Defendants’ petitioning activities—sending
prelitigation communications and suing—were done to
enforce Prop. 65, which was a ballot measure sanctioned by
California voters, and thus Defendants were petitioning on
behalf of the public and entitled to Noerr-Pennington
immunity. The district court also rejected B&G’s arguments
that Defendants’ Prop. 65 enforcement action was a sham,
because Defendants had been largely successful given the
allegation in B&G’s complaint that “over the last few years,
[Defendants] have extracted nearly $1.7 million in penalties
and fines from food companies” in acrylamide suits. After
determining that the complaint should be dismissed, the
district court denied B&G leave to amend. The district court
reasoned that any amendment would be futile because “[t]he
Noerr-Pennington doctrine would apply equally to all claims
based on Embry’s acrylamide litigation against B&G.”
B&G timely appealed.
II. STANDARD OF REVIEW
We review de novo “a district court’s dismissal based on
the Noerr–Pennington doctrine.” Kearney v. Foley &
Lardner, LLP, 590 F.3d 638, 643 (9th Cir. 2009). In doing
so, “[w]e accept as true the well-pleaded factual allegations
in the complaint” and construe them in the nonmoving
party’s favor. Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th
Cir. 2016).
“We review the denial of leave to amend for an abuse of
discretion, but we review the question of futility of
amendment de novo.” United States v. United Healthcare
10 B&G FOODS N. AMERICA V. EMBRY
Ins. Co., 848 F.3d 1161, 1172 (9th Cir. 2016) (citations
omitted).
III. DISCUSSION
A. The Noerr-Pennington Doctrine
“The Noerr–Pennington doctrine derives from the
Petition Clause of the First Amendment and provides that
‘those who petition any department of the government for
redress are generally immune from statutory liability for
their petitioning conduct.’” Kearney, 590 F.3d at 643–44
(quoting Sosa v. DIRECTV, Inc., 437 F.3d 923, 929 (9th Cir.
2006)). “The doctrine immunizes petitions directed at any
branch of government, including the executive, legislative,
judicial and administrative agencies.” Manistee Town Ctr.
v. City of Glendale, 227 F.3d 1090, 1092 (9th Cir. 2000).
“[C]onduct incidental to the prosecution of [a] suit,”
Columbia Pictures Indus., Inc. v. Pro. Real Est. Invs., Inc.,
944 F.2d 1525, 1528 (9th Cir. 1991), like presuit demand
letters and discovery communications, is also protected, see
Sosa, 437 F.3d at 933–38; Kearney, 590 F.3d at 646.
Though the Noerr-Pennington doctrine first arose in the
antitrust context, we have extended its application, including
to § 1983 claims. See Manistee, 227 F.3d at 1092 (“The
immunity is no longer limited to the antitrust context; we
have held that Noerr–Pennington immunity applies to claims
under 42 U.S.C. § 1983 that are based on the petitioning of
public authorities.”).
To determine whether a defendant’s conduct, which
allegedly violates a statute, is immunized under Noerr-
Pennington, we apply a three-step analysis to determine:
(1) “whether the lawsuit imposes a burden on petitioning
rights,” (2) “whether the alleged activities constitute
protected petitioning activity,” and (3) “whether the statute[]
B&G FOODS N. AMERICA V. EMBRY 11
at issue may be construed to [avoid] that burden.” Kearney,
590 F.3d at 644. If the answer at each step is “yes,” then a
defendant’s conduct is immunized under Noerr-Pennington.
See Sosa, 437 F.3d at 932. But such immunity is not
absolute, as “neither the Petition Clause nor the Noerr–
Pennington doctrine protects sham petitions.” Id. We
decide whether the sham exception applies within step two
of the three-part analysis. See id. at 938.
1. Step One: whether B&G’s § 1983 suit burdens
Defendants’ petitioning rights
Step one asks “whether the success of [B&G’s § 1983]
lawsuit would constitute a burden on petitioning rights.”
Kearney, 590 F.3d at 645. In conducting this inquiry, we do
not consider any alleged misconduct tied to the petitioning
activities. Id. Rather, when the petitioning activity is
incidental to the prosecution of a suit, the question is whether
plaintiff’s lawsuit “places a burden on [defendant’s] ability”
to prosecute its suit. Id. (holding that plaintiff’s suit, which
challenged defendants’ “discovery communications,
interactions with expert witnesses and contractors, and
statements to the court,” would burden defendants’ right to
prosecute an eminent domain proceeding because it would
burden defendants’ ability to bring such action).
B&G’s lawsuit burdens Defendants’ petitioning
activities. Indeed, if successful, B&G’s suit would
completely prevent Defendants from engaging in their
petitioning activities—sending prelitigation communications
and suing to enforce Prop. 65. See id. at 644 (filing a lawsuit
is “the very act of petitioning”); Sosa, 437 F.3d at 938(“prelitigation settlement demands” are protected by the
Petition Clause).
12 B&G FOODS N. AMERICA V. EMBRY
2. Step Two: whether Defendants’ conduct is
protected petitioning activity
Our focus at step two is whether Defendants’ conduct
qualifies as “protected petitioning activity.” Sosa, 437 F.3d
at 933 (emphasis added). In making this determination, we
must first decide whether the Petition Clause extends to
Defendants’ conduct. See id. at 933–38. If it does, we next
decide whether the sham exception to Noerr-Pennington
applies. See id. at 938. Sham petitioning is not protected.
“Noerr–Pennington immunity is not a shield for petitioning
conduct that, although ‘ostensibly directed toward
influencing governmental action, is a mere sham to cover
what is actually nothing more than an attempt to interfere
directly with the business relationships of a competitor.’” Id.(quoting Noerr, 365 U.S at 144).
We note that the Noerr-Pennington doctrine and its sham
exception arose in the antitrust context, and so the sham-
exception principles discuss whether petitioning is done for
an anticompetitive purpose or to interfere with a
competitor’s business relationships. See id. Because these
principles may be inapt in non-antitrust contexts in which we
have extended the Noerr-Pennington doctrine, we do not
treat them as rigid requirements in such situations. Rather,
we rely on them to create analogous standards suitable to
each case’s context. See, e.g., Manistee, 227 F.3d at 1095(relying on the antitrust-subjective-sham-inquiry principles,
which consider whether a process was used for an
“anticompetitive” purpose but determining in a non-antitrust
context that the corresponding inquiry is whether defendants
caused the harm by “abus[ing] . . . the publicity/lobbying
process” without any mention of an “anticompetitive”
requirement).
B&G FOODS N. AMERICA V. EMBRY 13
a. Whether the Petition Clause extends to
Defendants’ conduct
Assuming Defendants are state actors, our precedent
compels the conclusion that their activities were protected
by the Petition Clause. In Manistee, we held that the Petition
Clause protected lobbying efforts by government actors—a
city and its officials. Id. at 1093. We reasoned that applying
Noerr-Pennington to government actors was “consistent
with [the] ‘representative democracy’ rationale” for the
doctrine, as government “petitioning may be nearly as vital
to the functioning of a modern representative democracy as
petitioning that originates with private citizens.” Id.In Kearney, we extended Manistee to litigation activities
by government actors and their attorneys by holding that
conduct related to an eminent domain suit, which allegedly
violated § 1983, was protected petitioning. 590 F.3d at 644–
45. We found that “[t]here is no reason . . . to
limit Manistee’s holding to lobbying efforts,” id. at 644, and
that the representative democracy rationale applied equally
to lawsuits like eminent domain proceedings in which “a
governmental entity acts on behalf of the public it represents
. . . [in] seek[ing] to take private property and convert it to
public use.” Id. at 645.
Defendants’ activities seek to enforce Prop. 65, an
initiative adopted by California voters to protect the public
from harmful chemicals. See AFL-CIO v. Deukmejian, 260
Cal. Rptr. 479, 479 (Ct. App. 1989). Thus, Defendants’
conduct falls squarely within the conduct that we held was
protected in Kearney—litigation activities brought by
government officials to advance public goals. See Kearney,
590 F.3d at 644–45. Defendants’ conduct is therefore
protected by the Petition Clause.
14 B&G FOODS N. AMERICA V. EMBRY
B&G’s attempts to distinguish Kearney are
unconvincing. B&G argues that Kearney’s extension of
Manistee to litigation by government officials is non-binding
dicta because, in Kearney, we ultimately found Noerr-
Pennington inapplicable under the sham exception. But in
reaching our ultimate holding in Kearney, we applied our
three-part test. See id. at 644. Thus, before determining
whether the sham exception applied, we first determined that
defendants’ activities amounted to protected petitioning
activities. See id. at 646. In doing so, we engaged in a
detailed analysis that included analyzing our rationale and
holding in Manistee, finding that Manistee should be
extended to litigation activities, and analyzing whether
defendants’ conduct was protected petitioning. See id. at
644–46. Our extension of Manistee was therefore not dicta,
as whether defendants’ conduct was protected petitioning
under Manistee bore directly on Noerr-Pennington’s
applicability, and we resolved the issue after considered
analysis. See United States v. McAdory, 935 F.3d 838, 843
(9th Cir. 2019) (“[W]here a panel confronts an issue
germane to the eventual resolution of the case, and resolves
it after reasoned consideration in a published opinion, that
ruling becomes the law of the circuit, regardless of whether
doing so is necessary in some strict logical sense.” (alteration
in original) (quoting Cetacean Cmty. v. Bush, 386 F.3d 1169,
1173 (9th Cir. 2004))).
B&G argues that Kearney is relevant only when
government officials and their agents file eminent domain
proceedings. But nothing in Kearney suggests such a limited
holding. Indeed, in determining that Manistee should be
extended to conduct beyond lobbying, we reasoned that
Manistee’s rationale applied equally to “lawsuits” brought
by government actors. Kearney, 590 F.3d at 644 (“In a
representative democracy, . . . branches of government often
B&G FOODS N. AMERICA V. EMBRY 15
‘act on behalf of the people’ and ‘intercede’ to ‘advance their
constituents’ goals, both expressed and perceived.’ Such
intercession is just as likely to be accomplished through
lawsuits—the very act of petitioning—as through lobbying.”
(citation omitted) (quoting Manistee, 227 F.3d at 1093)).
And we did not distinguish between eminent domain
proceedings and other types of lawsuits. We therefore reject
B&G’s narrow view of Kearney.
Finally, according to B&G, Kearney involved
“intergovernmental petitioning” by a municipal official to a
state court. Thus, it argues that Kearney is distinguishable,
because here, state officials have petitioned a state court and
so there is no protected “intergovernmental petitioning.” We
are unpersuaded. Nothing in Kearney suggests that our
holding extending Noerr-Pennington immunity to
governmental entities and officials depended on whether it
was a state or municipal official who had engaged in the
petitioning activity. Moreover, why should it matter? “[A]
city is a political subdivision of the state, created as a
convenient agency for the exercise of such of the
governmental powers of the state as may be intrusted to it.”
City of Trenton v. New Jersey, 262 U.S. 182, 185–86 (1923).
We see no reason why Noerr-Pennington applicability
should turn on whether the petitioner is an official of a state
or one of its political subdivisions.
In short, under our precedent, Defendants’ prelitigation
communications and suit to enforce Prop. 65 are protected
by the Petition Clause.
b. Whether the sham exception applies
We have identified three circumstances in which the
sham exception might apply in the litigation context:
16 B&G FOODS N. AMERICA V. EMBRY
[F]irst, where the lawsuit is objectively
baseless and the defendant’s motive in
bringing it was unlawful; second, where the
conduct involves a series of lawsuits brought
pursuant to a policy of starting legal
proceedings without regard to the merits and
for an unlawful purpose; and third, if the
allegedly unlawful conduct consists of
making intentional misrepresentations to the
court, litigation can be deemed a sham if a
party’s knowing fraud upon, or its intentional
misrepresentations to, the court deprive the
litigation of its legitimacy.
Sosa, 437 F.3d at 938 (citations and quotation marks
omitted).
As an initial matter, we reject Defendants’ argument that
these exceptions do not apply to the NOV because the NOV
should be construed as petitioning directed toward a political
entity rather than a judicial body. The NOV is conduct
incidental to the prosecution of a suit, as it is a prerequisite
to filing a private enforcement action under Prop. 65 and,
like a presuit demand letter, essentially threatens litigation
against an alleged violator. See Cal. Health & Safety Code
§ 25249.7(d).
B&G argues that all three exceptions apply. But B&G
forfeited its argument on the third exception because it failed
to raise such argument below. See Visendi v. Bank of Am.,
N.A., 733 F.3d 863, 869–70 (9th Cir. 2013). We thus address
only the first and second exceptions.
Under the first exception, Defendants’ “lawsuit must be
objectively baseless in the sense that no reasonable litigant
could realistically expect success on the merits.” Pro. Real
B&G FOODS N. AMERICA V. EMBRY 17
Est. Invs., Inc. v. Columbia Pictures Indus., Inc., 508 U.S.
49, 60 (1993). “If an objective litigant could conclude that
the suit is reasonably calculated to elicit a favorable
outcome, the suit is immunized under Noerr . . . .” Id. “Only
if challenged litigation is objectively meritless may a court
examine the litigant’s subjective motivation.” Id. The
subjective element can be satisfied by showing that
Defendants “used government processes, as opposed to the
outcome of those processes, as a mechanism to injure” B&G.
Empress LLC v. City & County of San Francisco, 419 F.3d
1052, 1057 (9th Cir. 2005) (citing Manistee, 227 F.3d at1094–95). Compare Pro. Real Est. Invs., 508 U.S. at 60–61
(explaining that the subjective inquiry in the antitrust context
examines “whether the baseless lawsuit conceals an attempt
to interfere directly with the business relationships of a
competitor through the use of the governmental process—as
opposed to the outcome of that process—as an
anticompetitive weapon” (cleaned up)) with Manistee, 227
F.3d at 1095 (relying on the antitrust-subjective-sham-
inquiry principles in determining in a non-antitrust context
that the inquiry is whether defendants caused the harm by
“abus[ing] . . . the publicity/lobbying process”).
B&G has not plausibly alleged that Defendants’ suit was
objectively baseless. As relevant here, Prop. 65 requires a
plaintiff to show that a defendant (1) “knowingly and
intentionally expose[d] any individual to a chemical known
to the state to cause cancer” and (2) failed to give a “clear
and reasonable warning to such individual.” Cal. Health &
Safety Code § 25249.6. It is undisputed that B&G’s Cookie
Cakes contain some amount of acrylamide, that acrylamide
is on the list of chemicals “known to the state to cause
cancer,” and that B&G does not provide a warning. Given
all this, an objective litigant could have concluded that
Defendants’ suit was “reasonably calculated to elicit a
18 B&G FOODS N. AMERICA V. EMBRY
favorable outcome.” Pro. Real Est. Invs., 508 U.S. at 60.
Because B&G has failed to establish the objective element,
we need not reach the subjective element. See id. 4
We now turn to the second sham exception. We agree
with the district court that, under our precedent, B&G’s
complaint fails to plausibly allege the application of the
second sham exception. In USS-POSCO Industries v.
Contra Costa County Building & Construction Trades
Council, AFL-CIO, 31 F.3d 800 (9th Cir. 1994), we
explained that the second sham exception applies “where the
defendant is accused of bringing a whole series of legal
proceedings” without regard to the merits, id. at 811. In such
cases, “the question is not whether any one [suit] has merit—
some may turn out to, just as a matter of chance—but
whether they are brought pursuant to a policy of starting
legal proceedings without regard to the merits and for the
purpose of injuring a market rival.” Id. To determine
whether the exception applies, we ask: “Were the legal
filings made, not out of a genuine interest in redressing
grievances, but as part of a pattern or practice of successive
filings undertaken essentially for purposes of harassment?”
Id.In USS-POSCO Industries, the record showed that
“fifteen of the twenty-nine lawsuits” filed by defendants had
4
B&G also argues that, as in the labor-relations context, we need
not consider the objective element; we need consider only the subjective
element. But see White v. Lee, 227 F.3d 1214, 1232, 1232 n.16 (9th Cir.
2000) (stating that “[o]bjective baselessness is the sine qua non of any
claim that a particular lawsuit is not deserving of First Amendment
protection” and noting only one exception to this rule, which arises in
the labor relations context). We decline to address this argument because
B&G forfeited it by failing to raise it below. See Visendi, 733 F.3d at
869–70.
B&G FOODS N. AMERICA V. EMBRY 19
been successful. Id. We reasoned: “The fact that more than
half of all the actions as to which we know the results turn
out to have merit cannot be reconciled with the charge that
the unions were filing lawsuits and other actions willy-nilly
without regard to success.” Id. Thus, based on defendants’
success rate alone, we held that plaintiff had failed to show
that defendants’ conduct fell within the second sham
exception. Id.
B&G’s complaint alleges that “Defendants have filed or
threatened to file dozens of cases about acrylamide,” and
“Defendants have extracted nearly $1.7 million in penalties
and fines from food companies.” There are no allegations
about Defendants’ success rate. 5 Thus, the only reasonable
inference is that Defendants have been largely successful,
which as in USS-POSCO Industries, cannot be reconciled
with the theory that Defendants were threatening to sue and
suing without regard to success. See id. The district court
therefore properly found the second sham exception
inapplicable, given the allegations in the complaint.
In sum, Defendants’ conduct is protected petitioning
activity. Ninth Circuit precedent holds that government
officials engaged in petitioning conduct on behalf of the
public, like that present here, are entitled to Noerr-
Pennington immunity. See Manistee, 227 F.3d at 1093;
Kearney, 590 F.3d at 644–45. And B&G has failed to show
that any of the sham exceptions could apply based on the
5
B&G’s reply brief points to information outside the complaint to
support the application of the second sham exception. Because our
review is limited to the complaint, we do not consider such outside
information in analyzing whether B&G has plausibly alleged the
applicability of a sham exception. See Orellana v. Mayorkas, 6 F.4th
1034, 1042–43 (9th Cir. 2021).
20 B&G FOODS N. AMERICA V. EMBRY
allegations in the complaint. We thus move to the final part
of our three-part analysis.
3. Step Three: whether § 1983 can be construed to
avoid burdening Defendants’ protected
petitioning activity
“[T]he Noerr–Pennington doctrine stands for a generic
rule of statutory construction, applicable to any statutory
interpretation that could implicate the rights protected by the
Petition Clause.” Sosa, 437 F.3d at 931. “Under the Noerr–
Pennington rule of statutory construction, we must construe
federal statutes so as to avoid burdening conduct that
implicates the protections afforded by the Petition Clause
unless the statute clearly provides otherwise.” Id. Thus, we
ask at step three whether the statute—here 42 U.S.C.
§ 1983—can be construed to avoid burdening Defendants’
Petition Clause rights. See id.; see also id. at 932 (“Where
. . . the burdened conduct could fairly fall within the scope
of the Petition Clause and a plausible construction of the
applicable statute is available that avoids the burden, we
must give the statute the reading that does not impinge on
the right of petition.”).
As we recognized in Sosa, we determined in Manistee
that § 1983 cannot burden protected petitioning rights. Id. at
932 n.6 (describing Manistee as a case in which we
“declin[ed] to interpret 42 U.S.C. § 1983 as subjecting
governmental entities or officials to liability for activity that
would otherwise be with the protection of the Noerr–
Pennington doctrine”). In Manistee, a city and its officials
had lobbied a county not to lease space from a shopping
center. 227 F.3d at 1091. The shopping center sued the city
and its officials, “alleging that the defendants’ lobbying of
the County had deprived [the shopping center] of its property
(potential lease contracts) without due process of law in
B&G FOODS N. AMERICA V. EMBRY 21
violation of 42 U.S.C. § 1983.” Id. We determined that the
lobbying was protected petitioning activity and declined to
interpret § 1983 as subjecting the government and its
officials to liability for activity protected by Noerr-
Pennington:
Nor do we interpret § 1983 to subject
government entities or officials to liability for
activity that is protected by Noerr–
Pennington immunity. . . . The petitioning or
lobbying of another governmental entity is
insufficient to “subject” . . . a person “to the
deprivation of any rights, privileges, or
immunities secured by the Constitution and
laws.”
Id. at 1093 (quoting 42 U.S.C. § 1983). Thus, Manistee held
that § 1983 cannot burden protected petitioning rights. Id.
B&G tries to limit Manistee’s holding to lobbying only,
as according to B&G, “[l]obbying is not the evil that § 1983
was created to address.” But we said nothing in Manistee to
suggest that Noerr-Pennington immunity should be limited
to lobbying only. Rather, our statements in Manistee show
that we believed that the Noerr-Pennington doctrine barred
§ 1983 claims based on any protected petitioning conduct.
See id. (“[W]e [do not] interpret § 1983 to subject
government entities or officials to liability for activity that is
protected by Noerr-Pennington immunity.” (emphasis
added)); id. (“The petitioning or lobbying of another
governmental entity is insufficient to ‘subject’ . . . a person
‘to the deprivation of any rights, privileges, or immunities
secured by the Constitution and laws.’” (emphasis added)
(quoting 42 U.S.C. § 1983)).
22 B&G FOODS N. AMERICA V. EMBRY
B&G also argues that applying Noerr-Pennington
immunity would undermine one of the foundational
purposes of § 1983, which is to protect persons against
unconstitutional enforcement actions. To support its
argument, B&G discusses several cases in which § 1983 was
used to remedy the unconstitutional enforcement of state
laws. B&G’s argument is flawed, however, because it
ignores that its lawsuit does not merely seek to challenge a
state law as unconstitutional; it seeks to hold Defendants
liable for their petitioning conduct, thereby implicating the
Noerr-Pennington doctrine. 6 And the cases that B&G
discusses fail to advance its argument because none dealt
with Noerr-Pennington immunity.
In short, even assuming Defendants were state actors, the
Noerr-Pennington doctrine bars B&G’s § 1983 action
challenging Defendants’ protected petitioning conduct. 7
6
For this reason, the circumstances here are unlike those in our
concurrently filed opinion in California Chamber of Commerce v.
Council for Education and Research on Toxics, No. 21-15745. In
California Chamber, the plaintiff seeks declaratory and injunctive relief
that would apply to only prospective Prop. 65 suits. See Cal. Chamber
of Com. v. Becerra, 529 F. Supp. 3d 1099, 1113 (E.D. Cal. 2021); First
Am. Compl. for Decl. and Inj. Relief at 25–26, No. 2:19-CV-02019-
DAD-JDP (E.D. Cal. Mar. 16, 2020), ECF No. 57. In other words, unlike
here, the plaintiff in California Chamber does not seek to hold Prop. 65
enforcers liable for their past petitioning conduct.
We acknowledge that, as an example, a merits decision in California
Chamber that Prop. 65 acrylamide litigation involves unconstitutional
compelled speech might practically put an end to such litigation. But
because such a decision is only hypothetical for now, it does not affect
our Noerr-Pennington analysis.
7
We need not and do not decide whether Defendants acted under
color of state law under § 1983. Although we have discretion to do so,
B&G FOODS N. AMERICA V. EMBRY 23
B. Leave to Amend
“Dismissal without leave to amend is improper unless it
is clear, upon de novo review, that the complaint could not
be saved by any amendment.” Polich v. Burlington N., Inc.,
942 F.2d 1467, 1472 (9th Cir. 1991). We reverse the district
court’s denial of leave to amend because it is unclear
whether amendment would be futile.
B&G proposes additional allegations that could support
the application of the first sham exception, which examines
the objective reasonableness of defendant’s suit and
defendant’s subjective motivation. See Pro. Real Est. Invs.,
508 U.S. at 60. For example, B&G says that it could allege
that Cookie Cakes “unquestionably qualif[ies] for the NSRL
safe harbor,” and that Defendants made no effort to
investigate their claims and filed without regard to the
merits. A reasonable factfinder could infer from these
allegations that Defendants’ suit was objectively baseless
because they knew (or should have known) that B&G was
not violating Prop. 65 but filed suit anyway.
The new allegations could also support the subjective
element, as they could support the inference that Defendants
we believe it unwise given our decision to allow B&G to amend. B&G’s
amendments could affect the state actor issue. It is also possible that
B&G’s amendments could still fail to adequately allege application of
the sham exception, in which case it would be unnecessary to reach the
state actor issue. Also, if the state actor issue needs to be reached, we
would benefit from the district court’s analysis of the issue in the first
instance. We also decline to address B&G’s argument that the Noerr-
Pennington doctrine does not apply to claims for declaratory relief, as
B&G forfeited this argument by raising it for the first time in its reply
brief. See Cedano-Viera v. Ashcroft, 324 F.3d 1062, 1066 n.5 (9th Cir.
2003) (“[W]e decline to consider new issues raised for the first time in a
reply brief.”).
24 B&G FOODS N. AMERICA V. EMBRY
threatened and filed suit because they wanted to improperly
pressure B&G into settling, not because they believed that
they could achieve their objective based on the merits. See
Rock River Commc’ns, Inc. v. Universal Music Grp., Inc.,
745 F.3d 343, 353 (9th Cir. 2014) (holding that allegations
that a party hoped to enforce its “rights through the threat of
litigation rather than through actual litigation” could
“satisfy[] the second criterion for the sham exception”).
It is also unclear whether B&G could plausibly allege
application of the second sham exception, which arises when
defendant’s “conduct involves a series of lawsuits ‘brought
pursuant to a policy of starting legal proceedings without
regard to the merits’ and for an unlawful purpose.” Sosa,
437 F.3d at 938 (quoting Kottle v. Nw. Kidney Ctrs., 146
F.3d 1056, 1060 (9th Cir. 1998)). B&G points to
information in the amicus brief that Embry, while
represented by Glick or his co-counsel, has withdrawn 129
of her 260 NOVs concerning acrylamide and has settled only
25 cases. This information, which was omitted from the
complaint, could support an inference that Defendants’
acrylamide litigation was unsuccessful, as only a fraction of
their threatened suits succeeded. Such an inference would
undermine the district court’s sole basis for finding the
second sham exception inapplicable. Moreover, that
inference, together with the other new and existing
allegations—for example, that Defendants file without
regard to the merits and undertake no efforts to investigate
their claims, and businesses like B&G will often settle
because Prop. 65 suits are burdensome and very expensive
to defend—could support that Defendants’ suits were not
based on merit but were brought pursuant to a policy of
improperly pressuring businesses, like B&G, to settle.
B&G FOODS N. AMERICA V. EMBRY 25
Because it is unclear whether B&G could allege the
application of a sham exception to the Noerr-Pennington
doctrine in an amended complaint, the district court erred in
dismissing the complaint without leave to amend.
IV. CONCLUSION
The district court properly concluded that B&G’s § 1983
suit is barred by the Noerr-Pennington doctrine, given the
allegations in the complaint. But the district court erred in
denying leave to amend because it is unclear whether
amendment would be futile. We therefore reverse the
dismissal of B&G’s complaint and remand to allow B&G an
opportunity to amend. 8
The parties shall bear their own costs on appeal.
AFFIRMED in part, REVERSED in part, and
REMANDED.
8
Nothing in this opinion should be construed as precluding B&G
from raising on remand its arguments that have been forfeited in this
appeal. B&G should be allowed to offer amendments going to such
issues.